As big movies’ box office soars, the number of flops rises

Is Hollywood having a blowout year or a dismal one? The confounding answer: both.

This weekend, “The Dark Knight Rises�is expected to dominate the box office, joining “The Avengers�and “The Hunger Games�in a small, elite group of high-profit 2012 blockbusters. Buoyed by strong reviews and an eager fan base, director Christopher Nolan’s final Batman movie will probably debut with around $190 million in ticket sales, and has a shot at surpassing the three-day “Avengers� record of $207 million.

Domestic box office receipts are up 6.7% this year compared with the same period in 2011. But that number is misleading: More than $1 billion of the $6.05 billion in total box office has come from just “Avengers� and “Hunger Games.� Remove those, and total box office is actually down 11%.

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Dozens of major studio releases have been struggling, creating a widening chasm between filmic haves and have-nots. Studio executives and producers have been eyeing the growing wealth gap warily and even beginning to rethink budget and creative choices.

Just 14 movies have grossed the mid-range threshold of at least $100 million domestically this year, down from 2011, when 17 films had reached that milestone by mid-July. Even proven moneymakers such as Adam Sandler and Sacha Baron Cohen have seen their comedies fall short.

“We’re seeing big movies getting bigger at the same time that we’re seeing a lot more flops,� said Bruce Nash, who founded the box office statistics site The Numbers. “It’s like a knife’s edge, where moviegoers are either on one side or the other.�

Indeed, the number of bombs is higher than ever. In the first half of 2012, four big-budget studio releases — Universal’s�Battleship,�Disney’s�John Carter�andWarner Bros.’�Rock of Ages�and�Dark Shadows “— all made about half of their production budget or less at the domestic box office. (“Battleship� tallied a paltry $64 million on a budget more than three times that, though it did perform respectably overseas.)

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It’s the first time that so many major releases earned that dubious distinction in the first half of the year since the era of big-budget summer filmmaking began about 15 years ago. In the case of “Carter,� which like “Battleship� cost at least $200 million to produce, it helped lead to the ouster of Disney chief Rich Ross.

More than any other studio, Disney has felt the swing most acutely. Two months after “Carter,� “The Avengers� began its meteoric rise to $613 million domestically and $1.5 billion globally, the latter number the third-highest dollar total in Hollywood history. Lionsgate’s “The Hunger Games� took in $405 million after its March release. Both outstripped last year’s biggest hit, “Harry Potter and the Deathly Hallows Part 2,� which took in $381 million domestically.

The 2012 trend lines are stark even to longtime Hollywood players. “It’s always been the case that 20% of the movies in this town make 100% of the money,� said Chris McGurk, who was vice chairman at MGM and chief executive of Overture Films and now runs the film distribution company Cinedigm. “But I think you’re seeing the percentages get a lot more out of whack.�

He and others offer a number of explanations for the shift. High on the list is studios’ tendency toward extravagant bets, which can either pay off big time or bleed huge losses.

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Producer Neal Moritz, whose $125-million production�Fast Five�was a mid-range success in 2011 when it took in $209 million in domestic box office, said the wealth gap was the inevitable result of studios’ desire to release fewer movies at ever-larger budgets. “With big swings sometimes come big misses,� he said. “The middle has been cut out.�

And the wealth divide is self-perpetuating. When studios make these big gambles, they aim to saturate the marketplace — booking the film into as many theaters as possible and squeezing out other movies. “The Dark Knight Rises� is opening at 4,400 locations — nearly 80% of all theaters in the country.

“Maximizing the gross on a movie like ‘The Dark Knight Rises’ starts with the number of prints in the marketplace and the number of seats,� said Dan Fellman, head of distribution forWarner Bros.�We have a record number of prints and locations, and we have a record number of Imax theaters playing the movie.� He added, “The reality is, you don’t want to make mistakes on your tent poles.�

At the same time, theater owners have also steadily raised ticket prices in a manner that can boost revenue for the hits but deter consumers from seeing as many films as they once did. (3-D ticket prices in parts of Los Angeles and other urban areas can cost a family of four about $80 — and that’s before parking or snacks.)

And social media have an impact. The self-reinforcing effect of Twitter and Facebook can turn a mid-level hit into a major blockbuster — and a modest bomb into a neutron explosion.

That echo chamber, along with high ticket prices and the all-out marketing blitz for films like “Dark Knight,� are leading to a shift in consumer behavior.

“Things are not as steady and down the middle like they used to be. It’s so extreme now,� said Gene Harvey, who owns both a six-screen indoor theater and a drive-in in Barstow. “For ‘Dark Knight,’ everyone says, ‘When is that coming out, man?’ On the lesser films, it’s like you don’t even have the poster up.…’People Like Us’— it’s unbelievable how few people come see it; you think more would at least stumble into it. But we just had a small number.�

Or as Chris Aronson, president of domestic distribution for 20th Century Fox, explained, people might be losing the habit of going to the movies and simply spontaneously selecting a picture from the choices on the marquee.

“I believe that this business has changed into appointment movie-going instead of destination movie-going,� he said. “There are a lot of alarming things about appointment movie-going, and none of them are good. I think what it does is pinch the movies in between that could be very satisfying.�

How much all of this changes studios’ long-term plans remains to be seen.

Moritz said he and his counterparts are already feeling the effects of the pinch. To finance the big bets — and the losses — of their summer tent poles, studios have been applying pressure on producers to cut costs on all the other films, he said. “The movies that cost $100 million they’re now telling you to spend $60 million,� he said. “The ones that are $60 [million] they’re telling you $35 million.�

One of the industry’s most successful producers, who asked not to be identified so as not to jeopardize relationships with filmmakers, said this season is forcing him to rethink the movies he’s developing.

“It seems more and more like a case where unless you have one of the few movies that makes people get off the couch, you’re in trouble,� he said. “We have to look hard at which movies fit that description and concentrate on them.�

One template could be “Ted,�Seth MacFarlane’s raunchy spin on the politically incorrect comedy he practices, in a more FCC-friendly way, on his weekly animated TV series “The Family Guy.� It has grossed more than $160 million in the U.S. on a budget of just $45 million.

But insiders say Hollywood simply cannot sustain a system where 1% of the films get the lion’s share of the revenue, while the remainder fight for scraps.

“Ultimately, you’re going to see Hollywood go back to a broader portfolio business where they’re producing more movies across the budget spectrum,� McGurk said. “To keep doing it this way is suicide.�

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